§ Mr. David NicholsonTo ask the President of the Board of Trade if he will make a statement about the progress that is presently being made towards the introduction of full competition in the supply of electricity in 1998. [17966]
§ Mr. EggarThe Government attach great importance to the successful introduction of full competition in electricity supply in 1998. Consumers in the existing competitive market have already seen the substantial benefits that competition can bring. Customers with a maximum demand above 1 MW have been able to choose their electricity supplier since April 1990, when the electricity industry was vested, and the latest figures released yesterday show that average electricity price paid by manufacturing industry in Great Britain fell by nearly 11 per cent. in real terms between 1989 and 1994. Evidence suggests that some smaller industrial and commercial customers have achieved price reductions of up to 10 to 15 per cent. since the competitive market was further widened to cover all premises above 100 kW last year.
We want small consumers, including domestic consumers, to be able to share in these benefits after 1998. The broad objective is therefore that the industry should establish practical arrangements for 1998 that will enable customers to change their electricity supplier cheaply and easily, while continuing present levels of customer protection. This is a major undertaking with implications for every household. It requires careful planning if consumers and suppliers are to have confidence in the new market.
878WThe Director General of Electricity Supply issued a consultation paper in January of this year in which he set out his initial views on the trading and licensing arrangements that will be appropriate for 1998 and beyond, and in which he announced that he was setting up a 1998 co-ordination group for England and Wales under his chairmanship and with the participation of my Department. A separate co-ordination group for Scotland has also been set up. He has now held the first meetings of these groups. I welcome that initiative. The duty to promote competition is written into the Electricity Act 1989 and it is appropriate for the director general to take the lead in ensuring that all parties are working together.
I understand that the director general will shortly set a timetable for the 1998 process, which identifies each of the key issues to be addressed, those responsible and the deadlines that need to be met. Many decisions need to be taken as soon as possible this year and I encourage the electricity industry to work with Offer to ensure that the opening up of the market to full competition in 1998 takes place smoothly and delivers benefits to consumers.
§ Mr. DafisTo ask the President of the Board of Trade to what extent the timing of the sale of shares in the electricity generators was a consideration in determining the date of the publication of "Energy Paper 65". [16952]
§ Mr. Eggar"Energy Paper 65" was published as soon as it was ready. The timing of the sale of shares in the electricity generators was not a consideration in determining the publication date. The prospectus for the sale of shares in National Power and PowerGen included a reference to the new projections.